Time is ripe to formulate a vision for Defi 2.0

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Terra Luna collapse, Nomad bridge hack, Solana wallets hack… decentralized finance aka DeFi, has not put its best foot forward lately. All these issues are just part of a long line of hacks, scams, and collapses that have occurred in crypto over the years (see Crypto’s Dirty Little Secret).

The truth is that crypto encourages the “get rich quick or die trying” mentality. A significant amount of investors willingly move higher up the risk curve by chasing hype and yield, under the thinking that they are aware of the risks and will pull out before it’s too late. They rarely do.

When they hear about hacks and scams happening to others, instead of the reaction being “what can we do this from happening again” they instead think “thank goodness it wasn’t me” or “thank goodness it wasn’t on my chain” and continue their own white knuckle ride.

That sentiment does however appear to be changing I feel. With DeFi’s image in the gutter right now, there seems to be a realization from the broader crypto community (well anyone other than Bitcoin Maxi’s who are rubbing their hands in glee) that more needs to be done to make crypto safe, not just scalable.

What does this mean for Cardano and Algorand?

Algorand’s sponsorship of Carnegie Mellon CyLab’s Secure Blockchain Initiative is a step in the right direction, as well as Cardano’s focus on DApp certification. But both communities should come together to help develop the fundamentals of what Defi 2.0 should look like. How should asset transfers across chains work? What should the next generation of DEXEs look like? What are best practices when implementing wallets? How can advantages gained from bots be reduced or eliminated? How can Defi and the real world work seamlessly together? Can we build in mechanisms to slow down hackers in the event of a hack, and so on.

It seems to me that with the crypto industries chase of high yields having subsided, and better awareness amongst investors of the risk side of the risk-reward equation, that this is an opportune moment for both communities to be coming out with a shared vision for DeFi 2.0.

Published by ReddSpark

Follow me on Twitter: https://twitter.com/Reddspark1

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